UN sanctions bite Iran’s gas development hopes
Khatam al-Anbiya, an affiliate of the Iranian Revolutionary Guard Corps (IRGC), has withdrawn from the development of two phases of Iran’s South Pars gas field as a result of US sanctions against the country.
The company acts as the engineering arm of the IRGC, which has become increasingly involved in providing domestic contracting services. Reporting directly to Iran’s Supreme Leader, Ayatollah Ali Hoseyni Khamenei, the IRGC is listed as a terrorist organisation by Washington and has been directly targeted in the latest round of UN sanctions on Iran.
The company had been working on two phases of the South Pars development. However, “given the current circumstances, continuing of our work in phases 15 and 16 may endanger the nation’s resources”, the company said in a 16 July statement.
The Khatam al-Anbiya led consortium signed a $2 billion deal with the Ministry of Oil in June 2006 and work on the project started in January 2007.
With work on the project 50 per cent complete, the company will be replaced by the local Iran Shipbuilding & Offshore Industries Complex Company (ISOICO), state-run Mehr News reports.
Khatam al-Anbiya is also working on other phases of the South Pars project. It is part of a consortium of local firms awarded the development of phases 13 and 14 in late May, taking over from UK-Dutch oil major, Shell Group and Spain’s Repsol after the companies failed to commit to the project after more than eight years of talks (MEED 30:5:10).
The South Pars field contains some 500 trillion cubic feet of gas. The development of the project is at the centre of Iran’s strategy to meet growing domestic gas demands.